Boosted Malampaya supply welcomed amid oil crisis
The promise of additional natural gas from new Malampaya wells could help shield the Philippines from the volatility of the global oil market, as currently seen in the Middle East crisis, analysts said on Friday.
Juan Paolo Colet, managing director at investment bank China Bank Capital Corp., said the development of a portion of the $893-million Malampaya Phase 4 “comes at a crucial time.”
“The current oil crisis is a stark reminder of the critical importance of finding domestic energy sources, so the new discovery will certainly support our country’s drive for energy security,” he said in a message on Friday.
An economist also said it is “much needed … to have diversified energy supplies” as Filipinos grapple with fears of a potential shortage and ballooning prices.
With the additional gas supply expected later this year, Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said this would slash the market’s dependence on imported fuel.
Camago-3
President Marcos on Thursday announced the successful drilling and testing operations at the Camago-3 offshore well, which is capable of producing up to 60 million standard cubic feet of gas per day.
In a video statement, Mr. Marcos said Camago-3 was the second major milestone of Malampaya Phase 4.
The President noted that Camago-3 holds around 2.5 times more recoverable gas than the Malampaya East-1, discovered in January this year. He said the two wells were projected to extend the life of the Malampaya gas field by “an estimated six years.”
Mr. Marcos said this development meant a more steady and cheaper supply of gas for power generation in the country.
Malampaya gas costs the Philippines roughly P4.80 per kilowatt-hour while imported gas costs P10.30, or more than double.
“Every unit of power we generate from Malampaya, instead of imported fuel, is money saved by households, by small businesses, by every Filipino who pays an electricity bill,” the President said. “And for the first time since the year 2000, new subsea pipelines are being laid in Philippine waters.”
‘Substantial addition’
Prime Energy, the gas unit of billionaire Enrique Razon, reported its successful drilling, completion and flow test of the Camago-3 well offshore Palawan.
Prime Energy is the operator of Service Contract No. 38. Its partners are UC38 LLC, Prime Oil & Gas Inc. and Philippine National Oil Co. Exploration Corp.
The group said Camago-3’s production capacity would be a “substantial addition” to Malampaya’s remaining gas resources and would support the Philippines’ “long-term energy security.”
“Delivering results of this scale in less than three years since the renewal of SC 38 is an amazing achievement and reflects what ‘Top Quartile’ performance looks like in the international oil and gas industry,” Prime Energy said.
In his statement, the President said that the target for the first gas delivery would be in the fourth quarter of 2026.
“And we are not stopping there,” he said. “Our next well, Bagong Pag-asa, sits 30 kilometers north of Malampaya and is already in the works.”
“This is indigenous energy. It is ours. This is our future. And it is how we protect every Filipino from the burden of rising global fuel prices,” Mr. Marcos said.
